10 Expected Credit Loss (Allowance and Provision) Calculation in IFRS 9

The Manual Reassignment step in the Stage Determination run has to undergo approval processes before the values can be used in ECL Run. Only those Manual Reassignment changes that are approved by the Checker will be used in ECL Run. Any overridden values in the Draft, Pending approval, or the Rejected status will not be considered. The ECL Run uses the results from the Manual Reassignment process with any Approved changes.

The ECL process computes the Expected Credit Loss, including the Allowance and Provision values. Generally, the Allowance is calculated for the drawn amount and the Provision is calculated for the Undrawn amount.